Westport Innovations (WPRT, Financial) reported unimpressive financial numbers for the third quarter of 2014. Westport experienced strong competition from gasoline engines in consideration of lower oil prices. Also, the company had geopolitical instability headwinds in crucial growth markets that led to this poor performance for the quarter.
Struggling to meet expectations
The Vancouver, British Columbia company posted net sales of $25.3 million, a drop of 46% compared to the same quarter a year ago. Its revenue failed to beat the analysts estimates of $27.7 million for the quarter. However, its net loss for the quarter improved approximately 16% to $25.5 million or earnings of $0.40 per share, compared to $30.2 million or earnings of $0.53 per share in the same period last year. Analysts had estimated earnings of $0.44 per share for the quarter.
Looking ahead, the company has revised its revenue guidance for the full year. Westport expects its revenue to be in the range of $130-140 million for the full financial year. Westport is all set to achieve positive EBITDA by the end of fiscal year 2015. Westport is upbeat about its turnaround strategies that now concentrate on the complete commercial operation and profitability of market creation.Â
Making progress
Westport is aggressively executing various strategic initiatives. Westport is also prioritizing its program spending based on many factors such as market timing signals and partner readiness. The company is also working close with OEMs across the world in order to create world-class natural gas technology and products. Moreover, its next generation programs such as HPDI programs with most OEMs should generate greater profitability for the company in the future.
The company has recently rolled out an enhanced spark ignition engine called ESI that should increase market share in the natural gas vehicle market. This enhanced spark ignition engine is expected to outpace the conservative spark ignition engine in the market. This will also accelerate performance for natural gas vehicles and enhance their fuel economy. Further, the company is engaged in risk-sharing commercialization agreement with respective business partners that should help the company augmenting sales for its ESI products across the world.
The company should also benefit from its next generation program which includes products such as next generation engine for Volvo cars. Also, its HPDI program continues to win market share for the company. Westport and Delphi recently rolled out its jointly-developed HPDI fuel injection system at the Hanover trade fair. This DPDI fuel injection system is expected to accelerate higher performance, durability and scalable manufacturing.Â
Conclusion
Westport Innovations will benefit from its model of complete commercial operation and profitability going forward. It is also observing strong infrastructure development across the world that should support its growth in the future.
